Official: Yellow pages may be worthless

This is an instructive moment in the increasingly troubled journey of local business listings directories.

Yellowbook (US) and Yellow Pages (UK) publisher Hibu has warned investors that restructuring under consideration “may attribute little or no value to the group’s ordinary shares“.

After drawing up a strategy to expand from listings to online marketing services, the former Yell Group, which also operates Yell.com, changed its name this spring, in an effort to draw a line under its paper-directories past.

“Although the group is delivering cost savings through its new global operating model and remains cash generative, these trends continue to impact current and expected financial performance and it is now expected that EBITDA will under perform market expectations for the current financial year.”

Shares were down by a third by mid-morning in London, as investors jumped off the boat.

CEO Mike Pocock said Hibu is exploring restructuring its balance sheet with its lenders, “the aim of which is to provide the group with an appropriate capital structure to support the legacy business while enabling growth and development of the digital strategy“.

Effectively, Hibu is struggling under the weight of its once-mighty directories heritage, whilst trying to invest in diversifying from an online listings equivalent that has been threatened by ad operators like Google.

That’s a conundrum, but a necessary and, therefore, worthy one. Hibu does have a very clear vision for what it wants to do in digital, and has taken positive steps this year toward that. Pocock hired MSN’s Scott Moore as chief digital officer, opened new digital offices in Seattle and refocused on providing customers marketing services like website creation and SEO. Hibu built 337,000 of those sites in 2011.

Hibu has not been the only local business listings owner to reform. AT&T Advertising Solutions, which published the printed U.S. Yellow Pages, and AT&T Interactive, which operated YP.com and YPmobile, this year span the efforts out in to a single separate company, YP Holdings, which Cerberus Capital invested in to gain a controlling stake.

Challenged though each may be, both companies figured in this year’s paidContent 50 list of the world’s most successful digital media companies.